Wednesday, October 31, 2012

Collectors of alcohol products confront a dilemma most other collectors do not. The normal buying, selling, and trading that goes on in any other collecting hobby is, in their case, illegal. It is prohibited everywhere in the United States to sell any type of potable alcohol without a license.

One solution is auctions, which are legal in several states, although the auction house has to obtain an appropriate license. Whiskey auctions have only recently become common in the U. S. and the inclusion in them of American whiskey is an even more recent phenomenon.

This post from the L. A. Whiskey Society describes some problems with a recent Bonhams auction. Coincidentally, a correspondent wrote to me today about this same auction. In his case, he was offended by a bottle of Elmer T. Lee bourbon described as 'circa 1950s' that is more likely from the 1990s. Several other bottles fall into the same category.

Rightly, the L. A. Whiskey Society piece also criticizes the boneheads who pay high prices for items they could go into a store and buy for a fraction of the auction price. As much as one hates to see an error-riddled catalog tarnishing what is otherwise a good thing, it's hard to feel too sorry for anyone who has more money than sense.

Friday, October 26, 2012

There’s an interesting link between the new George Dickel Rye and Templeton Rye. Though not available in most of the country, Templeton Rye has, in a short time, become a major brand in Iowa and Illinois, including the major market of Chicago.

When Templeton debuted in 2005, the company was extremely secretive about where it was made. They wanted people to believe it was made in Templeton, Iowa, since mythology about that small town’s Prohibition-era reputation as a leading illegal whiskey source was the heart and soul of the company’s marketing strategy. That was impossible, since the company got its license as a distilled spirits producer the same year it launched its product, which as a straight rye whiskey had to be at least two years old, and tasted more like five or six.

Obviously, Templeton was whiskey made by another distiller, but who? Most lists of the usual suspects (including mine) didn’t include the old Seagram’s distillery in Lawrenceburg, Indiana, which turned out to be the source. Little was known about that distillery, then owned by Pernod-Ricard, except that it made Seagram’s Gin, Seagram’s Vodka, and Seagram’s Seven Crown Blended Whiskey, but no straight whiskeys sold in the U.S.

Since then, many straight ryes have been introduced using whiskey made by the distillery best known as Lawrenceburg Distillers Indiana (LDI), which last year was sold to MGP Ingredients, Inc. of Atchison, Kansas.
Templeton was the first to bring LDI’s unique 95% rye to market and George Dickel Rye may be the last, as least for now, since almost all of LDI’s current rye inventory is less than a year old. (Dickel has its supply locked up.)

The recipe, which calls for 95% rye grain and 5% malt, was developed many years ago, when Seagram’s still reigned. It was created by Larry Ebersold, then master distiller there. At first they made a standard rye whiskey, just 51% rye, the rest corn and malt. They wanted more rye flavor so they experimented with a recipe that was 80% unmalted rye and 20% malted rye. Everyone loved the result except the accountants, because malted rye is expensive, so they changed the proportions to 95% unmalted and just 5% malted rye. Still too expensive, said the accountants, so they replaced the rye malt with standard barley malt, and that’s the recipe LDI makes today.

The whiskey was always intended to be an ingredient in blends, not a straight. The company liked it so well for that purpose they decided to make it at their plant in Gimli, Manitoba, for use in Crown Royal and other Canadian whiskeys. They failed because a crucial strain of bacteria, native to Indiana, couldn’t survive beyond one generation in the harsher Canadian climate.

Since Templeton, the LDI rye has appeared as straight rye whiskey from
High West, Redemption, Filibuster, Smooth Ambler, James E. Pepper, and now Diageo's Bulleit and George Dickel.

Although Diageo doesn’t own LDI, they’re its biggest customer. For several years, Diageo has worked with LDI to develop rye whiskey products for Bulleit (released last year) and Dickel (coming soon) using the LDI rye.
The Bulleit version is very similar to Templeton but the Dickel Rye is different.

According to Dickel Master Distiller John Lunn, the aged whiskey is transported from Indiana to the Diageo bottling facility in Plainfield, Illinois, near Chicago. There it meets up with charcoal sent from the Dickel distillery near Tullahoma, Tennessee. At Plainfield, it goes through the exact same charcoal mellowing process as George Dickel Tennessee Whisky does at the distillery. The only difference is that the Tennessee Whisky is filtered before aging and the rye is filtered after aging. It is done in the same way using the same charcoal, after chilling the whiskey to 40°F.

Compared to Bulleit Rye, the difference in flavor is dramatic. Critics of filtering claim it makes any whiskey less flavorful, but that’s not the case here. There is plenty of flavor, but it’s different. Bulleit Rye is fruity but the fruits it suggests are red grapes, plums, and dark berries. Dickel Rye has a strong citrus flavor, suggesting variously grapefruit or pineapple. It’s appropriately sweet with a little bitterness, like peanut brittle, licorice or sassafras. There’s some soot and also raspberry and apricot.

If Dickel Rye does well it will be good for LDI, since Lunn says there are no plans to distill rye at the Tullahoma plant. “We’re concentrating on making the best Tennessee Whisky we can,” he says. They’re not planning to expand the distillery or build more warehouses either, but they have 600 acres, so there’s plenty of room to grow. There are no other products or projects, such as limited edition releases, that Lunn wants to talk about, “but we’re always looking at innovation, what we can do and what the people want,” he says.

At 42, Lunn is one of the youngest master distillers for a major producer. He was trained by his predecessor, Dave Backus, and even got to meet Ralph Dupps, who built the current Dickel distillery in 1958. Dupps gave him one piece of advice, “Don’t change a damn thing.”

He hasn’t. Dickel is unique in operating almost exactly as it did 50 years ago, with no computerized control systems.

The business has been buzzing about rye whiskey for almost a decade, but in the last year or so several new ryes have been introduced as line extensions of major bourbon or Tennessee whiskey brands, including Jack Daniel’s, Knob Creek, Bulleit, and now George Dickel. This should prove whether or not the heavily-publicized rye whiskey revival really has legs or not.

NOTE 10/29: Made a correction today based on information received from Diageo. When Lunn said they 'use the same charcoal," I incorrectly assumed they filtered it at the distillery. Instead they send the charcoal to Plainfield, Illinois, where Dickel is bottled. Sorry about that.

Monday, October 22, 2012

Jack Daniel's is one of the world's best known and best selling whiskeys, arguably (depending on which survey you use) THE top dog. It is also one of the world's most powerful brands, built on whiskey, but sold on everything from t-shirts to menu items at T.G.I. Fridays.

All of that makes Jack Daniel's Unaged Tennessee Rye a very important new product. Everyone wants to know what it means for both the rye whiskey and white (i.e., unaged) whiskey segments. Most people don't care that it has also created a controversy involving one of the principal regulators of the beverage alcohol industry, the U.S. Treasury Department's Alcohol Tax and Trade Bureau (TTB).

TTB's main job is collecting taxes. The tax burden on alcohol is second only to tobacco. No matter how poor you are; if you drink, you pay a boatload of tax to all levels of government, the federal government most of all.

TTB's second most important job is regulating the way beverage alcohol products are labeled and marketed. In return for all the millions we drinkers pay in taxes, TTB makes sure the products we drink are what they claim to be and are marketed responsibly. Its rule book is in the Code of Federal Regulations, where you can look it up. The part covering distilled spirits is Title 27, Chapter 1, Part 5, Subpart C, and is called the Standards of Identity for Distilled Spirits ('the Standards').

One of the rules is that every distilled spirits product has to fit into one of TTB's established classes. Whiskey, for example, is a class. Each class is strictly defined in the Standards. Jack Daniel's Tennessee Whiskey is classified as whiskey. That's why people who care about such things were shocked when Jack Daniel's Unaged Tennessee Rye was classified, not as whiskey, but as neutral spirit.

As anyone who has tasted the product will attest, it's not neutral. So why is it labeled that way? Here's the explanation from Jack Daniel's spokesperson Rob Hoskins, "Jack Daniel’s packaging and legal departments argued that the Tennessee Unaged Rye should be labeled as an 'unaged whiskey' which we felt more accurately described the nature of the product to the consumer, but the TTB ruled against this proposal and would only approve the label under the category 'neutral spirit.'"

Strange, since the Standards define neutral spirit as, "distilled spirits produced ... at or above 190° proof." Mr. Hoskins says Tennessee Unaged Rye is produced below 140° proof and is destined, after aging, to become straight rye whiskey. It is, therefore, not neutral spirit.

But then what is it?

All of this was pointed out to TTB and Thomas K. Hogue, their Director of Congressional and Public Affairs, responded. "The regulations are pretty straight forward," wrote Hogue. "Whisky is defined ... as an alcoholic distillate from fermented mash of grain produced at less than 190° proof that must be stored in oak containers. Neutral spirits must be distilled at 190° or higher. A product that is made from fermented mash of grain and produced at less than 190° of proof but not stored in oak containers would be a distilled spirits specialty product, as it would not meet any of the standards of identity."

It could, according to Hogue, be further labeled as spirits distilled from grain. He noted that corn whiskey is an exception, since it need not be stored in oak containers, but must be at least 80% corn grain.

So that means Jack Daniel's Unaged Tennessee Rye is going to change its label, right? "Any time there is a concern that an approved label does not accurately reflect the contents of the bottle, that is something that we address directly with the label holder," writes Hogue.

Saturday, October 20, 2012

Savvy investors know that when the general pubic hears about a hot stock, that usually means it's done. Some of that is insider hubris, of course, but trends go through phases and mass popularity blunts leading edge by definition.

In one of the early reviews of Jack Daniel's new unaged rye, Kevin Gray of Cocktail Enthusiast writes that the product "helps to legitimize the unaged whiskey category." Does it? Or does it mark the beginning of the end?

Let's leave aside for a moment the absurd decision of the Tax and Trade Bureau (TTB) to classify Jack Daniel's Tennessee Rye as a neutral spirit. We all know what it is, even if the increasingly irrelevant TTB does not.

Kevin Gray is clearly a fan of micro-producer white whiskeys, especially since he thinks the new Daniel's rye delivers "easy-drinking mellowness." Everything is relative.

Whether from micros or majors, most white whiskey is simply white dog, spirit straight from the still that's hot and harsh and badly in need of long years in wood.

Gray's analysis of the marketplace is intriguing. "For Jack to be playing in this space at all means something. It shows that the [white whiskey] category isn’t just for fringe players who cannot afford to let their
whiskeys sit in barrels for upwards of four years. But a category worth the
interest of the industry’s biggest brands."

As he notes, Buffalo Trace, Heaven Hill, and even Maker's Mark have toyed with unaged products, but this Daniel's rye and the impending Jacob's Ghost from Jim Beam take it to a different level due to the immense power of those two brands.

Gray hopes "this doesn’t hurt the micro distillers. Companies like Death’s
Door, Finger Lakes and Woodinville
each make a fine unaged whiskey. But with Jack Daniel’s and others on the
playing field, it could raise interest and visibility of the category as a
whole, thereby helping the small guys gain a better foothold."

Or not.

One white whiskey producer confided surprise at the Daniel's and Beam moves, because he is beginning to think the whole white whiskey thing is just about played out. Whether or not it is would seem to depend on how consumers respond to the Daniel's and Beam products.

Meanwhile, micro-producers might want to think about installing filtration systems. Though still extremely harsh by fully aged whiskey standards, the new Jack Daniel's Rye is certainly milder than a typical white dog due to the charcoal mellowing all Daniel's new make receives. Often described as a jump start to aging, charcoal mellowing tempers, transforms, or removes many of the harsh congeners responsible for white dog's challenging taste. Beam's Jacob's Ghost is actually one-year-old bourbon that has been extensively filtered to remove its color and harsher flavors.

Unless you prefer a spirit that takes off the top of your head, both are an improvement over the typical micro-producer white whiskey.

Does any of this bode well for micro-producers, as Gray hopes? Or is it the death knell for their white whiskeys?

It could be both. White whiskeys may need to change. Luckily, the ability to reinvent oneself quickly should be a micro-producer advantage. Instead of trying to make their products more palatable with short aging in little barrels, micro-producers might try filtration. It's a completely natural, legitimate, and historically authentic way to process whiskey, and it doesn't take years to work.

Saturday, October 13, 2012

This is a great time of year to visit Kentucky, especially if you're coming from the north. Generally, the onset of cold weather there is about two weeks behind what it is here in Chicago.

Plus, now there is something new to see and do.

Yesterday, Kentucky Gov. Steve Beshear announced the launch of the Kentucky Bourbon Trail Craft Tour, a new tourism adventure that links the state’s micro-distilleries. The Governor made the announcement with Lexington Mayor Jim Gray at Barrel House
Distillery, part of the city’s new Distillery District.

The new tour, featuring seven artisan distilleries stretching from Marshall to Mason
counties, is designed to complement the Kentucky Bourbon Trail experience that has
become one of the Commonwealth’s most popular attractions.

Eric Gregory, President of the Kentucky Distillers’ Association (KDA), which will coordinate the tour, said Kentucky is the first and only state with an expedition specifically designed to showcase its flourishing craft distilling industry. Gregory said the camaraderie between historic and boutique distilleries played a key role in forging this new attraction. “For 200 years, one of the distinctive hallmarks of our
industry has been the fellowship between distilleries, no matter how big or small. We’re proud that tradition continues today and will ensure that Kentucky remains the
one, true authentic home for Bourbon."

The tour will officially launch on Thursday, Oct. 18, with the “Bung Heard ‘Round the
World” event. Each distillery will have a press conference with local dignitaries and
pound a bung into a barrel at 10 a.m. EST to signify that the tour is open for business.

Monday, October 8, 2012

When is a neutral spirit not a neutral spirit? When it's a Jack Daniel's product, apparently.

The young saga of new Jack Daniel's Unaged Rye has already gotten curiouser and curiouser. The story begins with Friday's post about two new 'white whiskey' products from Jim Beam and Jack Daniel's.

Looking at the photograph of the Jack Daniel's package provided by the distillery, inquiring minds wanted to know how a product distilled at 140° proof (70% ABV), as they described the product, could be labeled 'neutral spirit,' considering that the regulations of the U.S. Treasury Department's Tax and Trade Bureau (TTB) clearly state that neutral spirit is a distilled spirit distilled at more than 190° proof (95% ABV). (The exact wording is reproduced below.)

Well, that apparently is not what 'neutral spirit' means if you're Jack Daniel's. Below is the explanation from Jack Daniel's PR agency. I'm flabbergasted, but there it is.

Mr. Cowdery,

Good afternoon. Thank you for your inquiry. Per the portion of the Code of Federal Regulations describing neutral spirits (vodka) and whiskey copied and provided below, vodka has to be distilled at or above 190 proof and “without distinctive character, aroma, taste, or color. Whiskeys must be distilled at less than 190 proof and “possess the taste, aroma, and characteristics generally attributed to whisky, stored in oak containers (except that corn whisky need not be stored), and bottled at not less than 80 proof.”

The net of this is that our unaged rye did not satisfy the “Class 2; Whiskey” requirement of being stored in an oak container, therefore the TTB ruled that it should be labeled as a “neutral spirit” even though it was distilled at 140 proof and obviously violates the stated vodka requirement of being “without distinctive character, aroma, taste, or color.” By this ruling, it is assumed that the TTB considers all whiskies (except corn whisky) to be neutral spirits until they enter the barrel for maturation. Jack Daniel’s packaging and legal departments argued that the Tennessee Unaged Rye should be labeled as an “unaged whiskey” which we felt more accurately described the nature of the product to the consumer, but the TTB ruled against this proposal and would only approve the label under the category “neutral spirit”.

Jack Daniel’s understands this category classification can certainly be a point of confusion. The Jack Daniel’s Tennessee Unaged Rye is a fermented mash of 70 percent rye, 18 percent corn, and 12 percent malted barley that was distilled at 140 proof and charcoal mellowed, but it was never entered into an oak barrel.

Again, thank you for your inquiry. Please let me know if you have more concerns or questions.

Title 27: Alcohol, Tobacco and Firearms
PART 5—LABELING AND ADVERTISING OF DISTILLED SPIRITS

Subpart C—Standards of Identity for Distilled Spirits
§ 5.22 The standards of identity.
Standards of identity for the several classes and types of distilled spirits set forth in this section shall be as follows (see also §5.35, class and type):

(a) Class 1; neutral spirits or alcohol. “Neutral spirits” or “alcohol” are distilled spirits produced from any material at or above 190° proof, and, if bottled, bottled at not less than 80° proof.

(1) “Vodka” is neutral spirits so distilled, or so treated after distillation with charcoal or other materials, as to be without distinctive character, aroma, taste, or color.

(2) “Grain spirits” are neutral spirits distilled from a fermented mash of grain and stored in oak containers.

(b) Class 2; whisky. “Whisky” is an alcoholic distillate from a fermented mash of grain produced at less than 190° proof in such manner that the distillate possesses the taste, aroma, and characteristics generally attributed to whisky, stored in oak containers (except that corn whisky need not be so stored), and bottled at not less than 80° proof, and also includes mixtures of such distillates for which no specific standards of identity are prescribed.

Thanks,
Rob Hoskins
Jack Daniel’s Media Relations

As I replied to Mr. Hoskins, the definition of ‘neutral spirits,’ as a class designation, is
distinguishable from the definition of vodka, which appears below it as a
type designation within the class of neutral spirits, much as ‘rye
whiskey’ appears as a type designation within the class of whiskey. The
definition of ‘neutral spirits’ as a class, while it does not include
the "without distinctive character, aroma, taste, or color" requirement
for vodka, does clearly state that the spirit must be distilled above
190° of proof. The ruling as described would seem to undermine
the definition of neutral spirits for more purposes than just the
labeling of this one Jack Daniel’s product.

Friday, October 5, 2012

Clearly, there is some high level market research out there that says so-called 'white whiskey' is a product consumers want, because the world's two biggest American whiskey brands are rolling out their versions over the next few months.

Micro-producers created the white whiskey category a few years back, ostensibly as a way to generate revenue while their whiskey aged. Mixologists praised its bold, spicy character as a great cocktail ingredient and its clear appearance appealed to people for whom vodka is the quintessential cocktail base.

An informal survey of whiskey enthusiasts showed that while most find white whiskey interesting, few actually drink it regularly. No one reported buying a second bottle.

Although white whiskey must, by law, have some minimal contact with wood to be called 'whiskey,' it can be as little as five minutes, too brief for the wood to have any effect on flavor or appearance. Unlike Europe and most of the rest of the world, the U.S. has no minimum aging requirement for whiskey. It just says the spirit must be 'stored in oak barrels' in order to be called whiskey. It doesn't say for how long.

The rap on white whiskey has been that it's simply white dog, whiskey distillate straight from the still, too hot and harsh to be truly enjoyable, especially neat or on-the-rocks, the way most whiskey enthusiasts drink. This has continued to be true despite the sometimes hyperbolic claims of the micro-producers for whom it is bread and butter.

Although both products are bottled at a mild 40% ABV, Jim Beam and Jack Daniel's are approaching the subject differently, from the micros and from each other.

Beam's product is called Jacob's Ghost, after 18th century family patriarch Jacob Beam. It is standard Jim Beam bourbon, aged one year, then heavily filtered to remove the color and harsher flavors. The result is a product that is still pretty raw, but much milder than white dog, with significant amounts of corn body and barrel sweetness. It is scheduled to be released in January.

Beam calls its product white whiskey, Daniel's does not. Because it's not whiskey.

As the press materials say repeatedly, new Jack Daniel's Unaged Tennessee Rye is the first new grain bill used at Jack Daniel's since Prohibition. "While many rye products only contain the required 51 percent rye in their grain bill, Jack Daniel’s Unaged Rye consists of a grain combination of 70 percent rye, 18 percent corn and 12 percent malted barley."

Notice the use of the term 'rye products,' not 'rye whiskeys.'

Take a close look at the label. Jack Daniel's Tennessee Rye is not whiskey, it's neutral spirit.

From the taste, it's hard to believe it meets the legal definition of neutral spirit. It tastes like a mild whiskey white dog.

Jack Daniel's Master Distiller Jeff Arnett, in his tasting notes, talks the way you would about an unaged rye whiskey. He describes it as more fruity than spicy, and he's right about that. They also as much as say it was already in barrels when they decided it was so good they should sell it white. That sounds like a fairy tale anyway, but is incompatible with the neutral spirit classification.

You see, the terms 'neutral spirit' and 'whiskey' are mutually exclusive. A product can't be both. You also can't put neutral spirit into a barrel and someday harvest whiskey, although they imply that's what they're doing with the phrase, "it's just a taste of what's to come."

I imagine people will be talking about it as "Jack Daniel's moonshine," but it's actually Jack Daniel's vodka, and that's just bizarre.

Both products are far more drinkable than a typical micro-producer 'white whiskey.' The Daniel's rye is spicier and drier than the Beam product. Still, you have to have at least some affection for white dog to drink either, because that's still how they taste.

Everything Arnett says about the product is consistent with how it tastes, but not with how it's labeled. That's the mystery.

Beam predicts that the new visitor experience will more than double tourism visits to Clermont, to 200,000 annually.

This will be the first time public tours have gone inside a Beam distillery.

Yesterday's openings represent a $30 million multi-year investment by Beam.

According to family lore, patriarch Jacob Beam sold his first barrel of whiskey in Kentucky in 1795.

“Today is another great day for the Commonwealth of Kentucky,” said Governor Beshear. “The Bourbon industry plays a vital role in Kentucky’s economic success and the opening of the fantastic Jim Beam American Stillhouse means more tourism for our state and ultimately more jobs for Kentucky families.”

The new 57,000 square foot Global Innovation Center on the distillery grounds features state-of-the-art technical, R&D and design labs that will fuel the company’s aggressive new-product development initiatives for all markets around the world.
“We aim to deliver 25 percent of our company’s annual sales growth from new products, and our new Global Innovation Center will help ensure our innovation capabilities remain second to none,” said Beam President and CEO Matt Shattock.

The Jim Beam American Stillhouse
showcases the Jim Beam Bourbon-making process from start to finish. Guided tours start with Beam’s natural limestone water well and take guests through the mashing, distilling, barreling, storing and bottling lines. A total whiskey immersion engages the senses, while also offering guests a historical look at The First Family of Bourbon.

The Jim Beam American Stillhouse is located approximately 30 minutes southeast of Louisville and is open weekdays and Saturdays 9:00 a.m. to 5:30 p.m. and Sundays from 12:00 p.m. to 4:30 p.m. (Closed on Sundays in January and February, as well as New Year’s Day, Easter, Thanksgiving Day, Christmas Eve and Christmas Day).
For more information or to order your reservation tickets online, visit the Jim Beam American Stillhouse online at www.AmericanStillhouse.com or under the “distillery” section of www.JimBeam.com.

Tuesday, October 2, 2012

A lot of bits were spilt earlier this year about the contents of Van Winkle bottles, in particular the presence or absence of Stitzel-Weller bourbon, an increasingly scarce and precious resource since it stopped being made back in 1992.

This is not about any of that but rather a little story about the Whiskey Obsession, also known as Whiskirexia Nervosa, a condition whose principal symptom is an unreasonable belief that no matter how many bottles of whiskey you already have, there is one more you desperately need.

Everett's is a liquor store in South Beloit, Illinois, which is right on the Wisconsin border. It's a good store and they do some excellent single barrel selections, chosen by either Bryan (pictured above in 2006) or his father, Brian.

It was in 2006 that someone was watching the web cam in the single barrel bottling house at Buffalo Trace Distillery and saw them dump two Stitzel-Weller barrels that were something like 14 and 16 years old, respectively. The whiskey was being bottled as Weller 12-Year-Old for Everett's, as evidenced by the gold sticker being affixed to the bottles.

The rumor was that Julian Van Winkle III was furious when he found out about it. They were BT's barrels, the story goes, but Julian coveted them for his Van Winkle label.

Word of the bottling spread quickly throughout the bourbonian community.

The store didn't know what it had and priced them at $20 a bottle, and even gave their usual 5% discount on cases. To their credit, they didn't raise the price even after they started to get phone calls from all over the world. Of course, they wouldn't ship.

I immediately dropped what I was doing, drove out from Chicago, and got a case. That was a 3+ hour round trip for me, but I heard someone came from Pennsylvania, and a couple people came from Indianapolis.

I have a few bottles left and try to resist opening them because I think they're defective. Almost as soon as they're open, they're empty. I can't explain it.